What is demand management?
Introduction to demand management
"Demand management is an approach to achieving efficiencies that reaches beyond the boundary of the organisation. By changing the nature of the council's role and relationship with customers, local authorities are seeking alternative mechanisms to meet customer needs and thereby better manage demand. Changing behaviours – of frontline practitioners, managers and customers– often features as a critical enabler of demand management."
From Managing Customer Demand
What do we mean by "demand"?
Demand arises when residents turn to the council to fulfil a need. This could be something simple such as reporting fly-tipping to the council, or paying a council tax bill. But demand can also be complex and require long-term resources, such as the need for residential care following a hospital admission.
There are different types of demand that councils inadvertently create which can be managed more effectively. These include:
Demand which is avoidable. This is a need that can be better met by other means or channels. For example, offering an app which enables residents to easily report fly-tipping via their smartphone rather than having to call or email the council. The council receives richer information and residents are able to report issues at a time that is convenient to them, and both parties save time.
Demand which is preventable. This is when things could have been done earlier which would have prevented the need arising in the first place. For instance, with care for older people, when the right actions are taken early - such as fixing trip and slip risks around the home - this can help prevent falls and preserve mobility and independence for longer. This reduces the need for hospital admission and reablement services.
Demand which arises from failure. This is when demand is caused by the very system designed to respond to demand in the first place. For example a council department sending out poorly worded letters resulting in a high volume of residents calling the council contact centre to clarify or complain. Similarly a council department sending out letters to residents without liaising with their contact centre first prevents the contact centre from planning ahead for a potential influx of phone calls which would enable them better manage this demand.
In all of these cases, managing demand begins by recognising the root causes that drive demand. The behaviours, expectations and default actions of both residents and service providers can magnify and multiply demand. Any attempt to manage demand, while also seeking to improve outcomes, must be based on an understanding of how people - both those using and delivering services - behave, and what they want, need and aspire to.
What is demand management?
Demand Management is an outcome – it is ultimately about ensuring the right service reaches the right resident when and where they need it, for the best cost. By doing this you help the right resident and improve their experience, while reducing duplication and wastage, saving on unnecessary costs.
When applying demand management to your service(s), you should consider the following questions:
- Who uses/accesses your services?
- What services are they using?
- Why and for what purpose?
- How they access them?
- The journey they go on – from their initial request to getting the service they need
- Who is accessing / using services incorrectly?
- Where the blockages are in the system?
- Who or what could support managing demand?
By understanding and using this information, you can then better;
- redesign the process end-to-end so that residents and staff can use and access services more easily
- target your resources more effectively
What are the benefits?
There are many benefits of managing demand, as the case studies and examples highlighted throughout this resource illustrate. Key benefits include:
1. Delivering better outcomes to residents and communities by
- better targeting support and services to where they are most needed
- developing residents' independence and community resilience
2. Saving money through achieving operational and financial efficiencies by
- removing duplication and waste
- enabling customers to serve themselves
- targeting resources, and aligning supply more closely to demand
Some examples include:
- A range of initiatives were undertaken across Hampshire to reduce household waste applying customer insight and engagement techniques. This helped reduce household waste by 9,426 tonnes between 2010 and 2011 and a further 7,154 tonnes the following year. In total this is the equivalent to a saving of over £1 million in waste disposal costs.
This resulteed in Southampton City Council's waste and recycling services reducing contamination levels by 4 percent and CO2 emissions by 1,345 tonnes. It also saved £115,400 on waste disposal and increased textile recycling by 2.81 percent.
- Bradford's Youth Offending project helped reduce re-offending, and the associated judicial and custodial costs. This produced an overall saving of £1.39 million.
The project established multi-agency "compliance panels", and educated partners on the long-term risks of breaching bail. During the quarter in which the project ran, there was a reduction in detected offences from 1,066 to 371. According to Home Office research, the cost of an individual crime varies widely depending on the nature of the offence, but averages out to £2,000 per crime. Bradford estimates that the project delivered a saving of £1.39 million (i.e. 695 x £2,000).
- Lancashire County Council has estimated that if the average age of each person admitted to funded care was postponed by three months in any one year then the council would save a total of £4 million in three years.
Lancashire partnership has estimated that the cost of providing an older person with residential care amounts to approximately £13,000 per year. It used the list of residents registered for Assisted Bin Collections to indicate the number of customers who were likely to have other related needs.
Want to know more?
- For a good introductory overview, see Managing Demand: Building Future Public Services by the RSA, which looks at the financial case for demand management. It covers emerging evidence from small-scale interventions to early findings from ‘whole place' approaches.
- For a range of case studies outlining how local authorities have begun managing demand by understanding the drivers of behaviour, see Managing Customer Demand: Understanding and Changing Behaviours to Help Meet the Financial Challenge, by the LGA. The report gives some insight into the lessons learnt by featured local authorities. It also offers some conclusions for councils considering adopting demand management as a transformational strategy.
- For a summary of the range of approaches to demand management currently being practiced, see Demand Management and Behaviour Change: A Manual for Collaborative Practice, by The Leadership Centre & Collaborate. The paper also draws together theunderpinning principles of demand management and looks at the role behaviour change and social networks can play in managing demand.
8 April 2016
Eddie Copeland talks about the role digital tools and strategies can play in managing demand.
Tim explains how different behaviour insight techniques can help influence people's behaviour and actions in order to reduce costs or generate income.
Anna introduces the different types of demand, its drivers and how councils can manage their demand.
How Colchester embeds demand management tools and techniques throughout the council to make it ‘business as usual'.